Sew seeds outdoors as soon as they are ripe in early fall, or whenever the seed pod splits open.
Prepare a well drained, fertile seedbed outside. Remove seeds from seed pod and in unfrozen ground, plant the seeds in a row a few inches apart. Gently indent finger into soil, place seed in hole and cover with soil. Document or mark accordingly. Cover with dry fluffed up straw mulch. Cover straw with plastic to keep the straw DRY. Cover that with more straw to prevent heating. The idea is to postpone growth until April. Remove plastic and straw in late March/April.
Seedlings can be moved, disturbing as little of the root as possible, after the first year of growth. They may be set back a bit but giving the surviving seedlings enough space for its root system is essential.
There are many variations on starting peonies. The easiest and often most over looked is to simply press the seeds into the soil near the edge of parent plant in the fall just like in nature. The other methods all have their advantages and challenges. Challenges that faced have been critters eating the seeds, mostly mice from the surrounding fields and woodlands or squirrels digging up the newly germinated seedlings.
*Information sources include Bill Seidl, Harvey Buchite (Hidden Springs Flower Farm) and Nate Bremer (Solaris Farms)
Photo credit: Harvey Buchite of Hidden Springs Flower Farm